Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3250 × 7% × 4
= $3250 ×7/100 × 4
= 3250 × 7 × 4/100
= 22750 × 4/100
= 91000/100
= $910
Thus, Simple Interest = $910
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3250
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 4)
= $3250 + ($3250 ×7/100 × 4)
= $3250 + (3250 × 7 × 4/100)
= $3250 + (22750 × 4/100)
= $3250 + (91000/100)
= $3250 + $910 = $4160
Thus, Amount (A) to be paid = $4160 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $227.5 × 4 = $910
Thus, Simple Interest (SI) = $910
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(8) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.